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City selects vendors in benefits RFP; FY27 benefits burden projected at 32.4%
Summary
Following an RFP, staff recommended Sigma Healthcare for self‑funded medical/dental work and Blue Cross Blue Shield for voluntary vision; the benefits fund forecasts modest cost increases and a 32.4% benefits burden for FY27.
Human resources staff reported the results of an RFP for employee benefits administration and presented an FY27 projection for the benefits fund. Paula Kushka said Sigma Healthcare provided the most competitive proposal for the city’s self‑funded medical plan (excluding stop‑loss) and for dental; voluntary vision is expected to move to Blue Cross Blue Shield with rates guaranteed for multiple years.
Kushka said the benefits program is projected to grow about 5.6%–6% due to claims experience and that the FY27 benefits burden is projected at 32.4%—below the private‑sector benchmark used by the city. Staff said reserve targets (about 20% of expected claims) will be maintained and that the city expects only modest plan‑design changes in the coming year. The council asked for clarification on revenue vs. budget projections tied to staffing changes; staff said savings and eliminated positions affected projections and that details will be presented with final FY26 closeouts.
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